Opinion
7976/09
11-18-2011
Sweet Constructors, LLC, Plaintiff, v. Wallkill Medical Development, LLC, and WESTAGE HORTON, LLC, Defendants.
RICHARD B. ALDERMAN, ESQ. ALDERMAN & ALDERMAN, ESQS. Attorneys for Plaintiff MICHAEL FAHEY, ESQ. BARTELS & FEUREISEN, LLP Attorneys for Defendants
RICHARD B. ALDERMAN, ESQ. ALDERMAN & ALDERMAN, ESQS. Attorneys for Plaintiff
MICHAEL FAHEY, ESQ. BARTELS & FEUREISEN, LLP Attorneys for Defendants
James D. Pagones, J.
Plaintiff Sweet Constructors, LLC ("Sweet") moves pursuant to CPLR R3212 for an order dismissing the defendants' Wallkill Medical Development, LLC ("Wallkill") and Westage Horton, LLC ("Westage") counterclaims on the basis of res judicata. The defendants oppose the plaintiff's application and cross-move for an order pursuant to CPLR R3212 dismissing the plaintiff's complaint in its entirety, also on the basis of res judicata.
The litigation history between the parties is extensive. Initially, the parties were involved in a lawsuit commenced in 2005 by Wallkill and Westage against Sweet in relation to a construction project for the Horton Medical Pavilion in the Orange Regional Medical Center (the "Horton project"). The initial lawsuit alleged four causes of action based on Sweet's misappropriation of trust funds paid to it for architectural services rendered on the Horton project and breach of certain terms of a construction phase contract. In turn, Sweet asserted a counterclaim against Wallkill and Westage for nonpayment of the parties' design program agreement and work and material authorizations. Sweet later withdrew its nonpayment counterclaim "in order to enhance [Sweet's] motion for summary judgment by not permitting [Wallkill and Westage] to distract the Court with an argument that [Sweet's] performance of construction services pursuant to a series of independent agreement constituted acknowledgment of [Wallkill and Westage's] assertion that there was a comprehensive construction agreement between the parties."
After several years of litigation, Wallkill and Westage's contract and unjust enrichment causes of action against Sweet were dismissed by the Appellate Division, Second Department, which held that the parties never came to a complete agreement on the essential terms of anything other than the design program agreement. Approximately six months subsequent to the Second Department's issuance of its decision and shortly before the parties were scheduled to commence a trial on Wallkill and Westage's remaining causes of action, Sweet moved this court for leave to serve an amended answer. Sweet's amended answer sought to assert a counterclaim for work, labor and materials allegedly provided to Wallkill and Westage and performed at their request. The counterclaim Sweet sought to allege was identical to the claim it had withdrawn several years earlier for strategic reasons.
By order dated July 20, 2009, Sweet's motion to amend its answer was denied based, inter alia, on Sweet's intentional choice, for tactical purposes, to exclude the counterclaim it sought to assert from a prior amended answer. Thereafter, a three day bench trial was held in August 2009, after which a decision was issued by this court against Sweet in the amount of $61,081.40.
Almost immediately following the conclusion of the trial, Sweet commenced the instant action against Wallkill and Westage alleging nonpayment for Sweet's performance of various work, labor and services in connection with the Horton project, as well as a cause of action for account stated with respect to the work, labor, services and material allegedly provided by Sweet. Wallkill and Westage served a verified answer containing counterclaims against Sweet for breach of a construction agreement, unjust enrichment, fraudulent inducement and negligent misrepresentation. Each party now asserts that the others' claims are barred by res judicata.
In order "to obtain summary judgment, it is necessary that the movant establish his or her cause of action or defense sufficiently to warrant the court as a matter of law in directing judgment' in his or her favor (CPLR 3212[b]), and he or she must do so by tender of evidentiary proof in admissible form." (Friends of Animals, Inc. v. Associated Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979].) Parties opposing a motion for summary judgment are obliged to lay bare their evidentiary proof in admissible form in order to show that their allegations are capable of being established at a trial. (Albouyeh v. County of Suffolk, 96 AD2d 543 [2d Dept. 1983] aff'd 62 NY2d 681 [1984].) Bare conclusory allegations, expressions of hope or unsubstantiated assertions are insufficient. (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980].)
Res judicata " operates to preclude the renewal of issues actually litigated and resolved in a prior proceeding as well as claims for different relief which arise out of the same factual grouping or transaction and which should have or could have been resolved in the prior proceeding.'" (Union Street Tower, LLC v. Richmond, 84 AD3d 784 [2nd Dept. 2011] [citations omitted.) To determine whether a claim arises out of the same "factual grouping" or "transaction", the court must determine if "the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether...their treatment as a unit conforms of the parties' expectations or business understanding or usage." (Smith v. Russell Sage Coll., 54 NY2d 185, 192-193 [1981] quoting Restatement, Judgments 2d [Tent Draft No. 1], §61). New York's transactional approach to the doctrine of res judicata mandates that " once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy.'" (Union Street Tower, LLC, 84 AD3d at 785 [citations omitted].)
Sweet's causes of action are barred by res judicata because those claims could have, and should have, been resolved in the initial lawsuit. Sweet's causes of action relate both in time, space, origin and motivation to the initial lawsuit. Specifically, they (1) span the same period of time, (2) involve the same participants, (3) involve the design phase of architectural work performed, or allegedly performed, on the Horton project, and (4) involve the same motivation for Sweet to asserts claims for nonpayment. Having established a litigation strategy in the first lawsuit involving the initial assertion, then withdrawal, then attempted reassertion of a claim for additional monies due from Wallkill and Westage, Sweet is now obligated to live with the consequences of its strategy. In this instance, the consequence of Sweet's failure to timely assert its claim for nonpayment in the first action dictates that Sweet is now barred by res judicata from commencing a new lawsuit to assert the same claims.
Likewise, Wallkill and Westage's counterclaims, which are based on damages allegedly incurred by Wallkill and Westage as a result of Sweet's misrepresentation regarding its ability to secure certain payment and performance bonds and its failure to secure said bonds in relation to the Horton project, are also barred by res judicata. As with Sweet, Wallkill and Westage's counterclaims relate both in time, space, origin and motivation to the initial lawsuit. Moreover, the Appellate Division, Second Department has previously held in the first lawsuit that "the parties never came to a complete agreement on the essential terms of anything other than the March 26, 2004, design contract". (Wallkill Medical Development, LLC v. Sweet Constructors, LLC, 56 AD3d 764 [2md Dept. 2009].)
Therefore, it is ordered that the plaintiff's complaint and the defendants' counterclaims are dismissed, in their entirety.
The Court read and considered the following documents upon these applications:
PAGES NUMBERED
1.Notice of Motion........................1-2
Affirmation-Alderman...............1-9
Exhibits...........................A-H
Memorandum of Law..................1-4
Exhibit............................1
Supplemental Memorandum of Law.....1-8
2.Notice of Cross-Motion..................1-2
Affidavit-Ted Petrillo.............1-14
Exhibits...........................A-S
Memorandum of Law..................1-15
3.Affidavit-Victor Macri, Jr..............1-10
Exhibit............................A
4.Reply Affirmation-Fahey.................1-5
The foregoing constitutes the decision and order of the Court.
Dated:Poughkeepsie, New York
November 18, 2011
ENTER
HON. JAMES D. PAGONES, A.J.S.C.